Romania's Central Bank Policy of Limiting the Economic Recession

Abstract

In 2008, the global financial crisis has generated a feeling of distrust from investors and significantly increased their risk aversion. The size of current account deficit, the relatively high external financing needs and the dependence of the banks on it, the high ratio between loans in foreign currency and deposits in foreign currency made of the Romanian economy, a risky destination for investors.

In these conditions, since the end of 2008 and throughout 2009, the government's economic program was focused on reducing the external deficit in both public and private sector, on minimizing the effects of recession, on avoiding a crisis of the exchange rate and on cooling the inflationary pressures. Those requirements are found for 2010 and more so as our country has achieved significant loans in severe conditions.

Amid all of this external funding, adopting some political decisions harmonized with European measures of economic recovery, represents, according to specialists, a positive signal beginning with the third quarter of 2010.

Keywords: monetary policies, exchange rate, external financing

JEL Classification: G21